Philippines’ Ayala Land Transfers $305 Million Of Commercial Properties Into AREIT

Ayala Land—controlled by billionaire Jaime Zobel de Ayala and his family—said it has transferred office and retail properties worth 15.5 billion pesos ($305 million) into its real estate investment trust AREIT following regulatory approval.

The assets—with a gross leasable area of 205,000 square meters—will boost AREIT’s portfolio by 60% to 549,000 square meters. The properties, which are spread across Metro Manila, the province of Laguna, south of the capital, and Bacolod City in central Philippines, will start contributing to the office landlord’s earnings in the fourth quarter, Ayala Land said in a statement to the Philippine bourse.

As payment for the properties, AREIT will issue 483.3 million new shares at 32 pesos apiece to Ayala Land, raising Ayala Land’s stake in AREIT to 66% from 50.1%. “The infusion of the commercial assets is part of Ayala Land’s commitment as AREIT’s sponsor to support AREIT’s growth plans of building a larger and more diversified portfolio,” Ayala Land said.

Vertis North in Quezon City is the biggest commercial property transferred by Ayala Land to AREIT. It comprises three office towers with a combined gross leasable space of 125,507 square meters and a retail podium of 39,305 square meters. The office towers which are 97% occupied counts Google Services Philippines and other business processing outsourcing firms among its tenants.

Ayala Land also transferred to AREIT two Evotech Buildings in Nuvali, a residential and commercial estate developed by Ayala Land in Sta Rosa, Laguna. The office towers, with a combined gross leasable area of 23,723 square meters is fully occupied, have IBM Business Services among its tenants.

Other properties transferred to AREIT include the Bacolod Capitol Corporate Center and Ayala Northpoint Technohub, both located in the central Philippine province of Negros Occidental, as well as two office buildings in the Makati central business district and the southern Manila municipality of Alabang.

Shares of AREIT—the first-ever REIT to list on the Philippine bourse—have climbed 48% since its market debut in August 2020. Other developers have also listed their own office REITs including DoubleDragon Properties’ DDMP REIT, Filinvest REIT, the Gokongwei group’s RL Commercial REIT and Megaworld’s MREIT.

Ayala Land’s parent Ayala Corp. is the Philippines oldest corporation, tracing its roots to 1834 when the country was a colony of Spain. Jaime Zobel de Ayala’s grandfather started a distillery in Manila and then expanded into banking, hotels, real estate and telecommunications. Ayala, 86, was ranked the country’s fifth richest person with a net worth of $3.3 billion when the list of the Philippines’ 50 Richest was published last month. He retired in 2006, leaving his children to run the conglomerate.